THE MID-Term Policy Budget by minister of Finance Tito Mboweni as always solicit different opinions and this time you guessed right: bail out for troubled South African Airways hogged the headlines.
Mboweni indicated R10bn as a bail out for SAA and this did not augur well for many a political parties.
“This is morally indefensible,” says Democratic Alliance.
“This is the money that was supposed to be channelled to the poor and upliftment of infrastructure more than anything else.”
On another State Owned Enterprise Land Bank’s loan, Mzamo Buthelezi (MP) from the Inkatha Freedom Party, said they’re happy with the loan since the party is traditionally driven and this will create opportunities for emerging small scale farmers in rural areas.
According to Mboweni, the economy is now expected to contract by 7.8% this year, and the 2021 outlook is more uncertain.
He indicated government’s revised fiscal framework puts us on a course to stabilise the ratio of debt-to-GDP at around 95% within the next five years. The stock of gross debt will rise from roughly R4 trillion to R5.5 trillion in 2023/2024.
“The medium-term fiscal strategy narrows the main budget primary deficit from an expected R266 billion in 2021/2022 to R84 billion in 2023/2024 and we achieve a surplus by 2025/2026,” he said.
“We propose consolidated spending of R6.2 trillion over the 2021 Medium Term Expenditure Framework, of which R1.2 trillion goes to learning and culture, R978 billion to social development and R724 billion to health”.
Mboweni said government forecasts the South African economy to grow by 3.3% in 2021, 1.7% in 2022 and 1.5% in 2023.
Mboweni said the way has been opened for the procurement of almost 12 000 MW of new electricity capacity to be provided by independent power producers (IPPs).
Subsidies of R2.2 billion will support the Social Housing Programme aimed at poor, working South Africans. A further 6.7 billion has been contractually committed to this programme and total investment for the programme will be R20 billion over the next 10 years.
Student Housing Programme worth an estimated R96 billion is underway.
During the lockdown, cash grants were paid to over R22 million people, nearly half of the population;
Cabinet decided to extend the social relief of distress grant to the end of January 2021 and will direct R6.8 billion from the public employment programme allocation;
Mboweni, however, said temporary increases in other grants will, unfortunately, have to come to an end; and
R1 billion was also allocated for food relief to fight hunger.
R12.6 billion has been allocated to the employment initiatives championed by President Cyril Ramaphosa.
Provincial Equitable Share is augmented by R7 billion to support jobs at fee-paying public schools and government-subsidized independent schools; and
Mboweni also allocated R600 million to employ early childhood development and social workers.
Government is borrowing at a rate of R2.1 billion per day.
R3 billion was allocated to Land Bank in June. The bank will require an additional R7 billion over the medium-term to support its restructuring; and
Mboweni said the State Capture Commission of Inquiry has been allocated an additional R63 million from the Department of Justice and Constitutional Development to finalise investigations and produce a close-out report.
Cosatu -First President, Michael Shingange says they were disappointed the minister did not focus on rail, water and other projects investments but welcomed the bail out for SAA as it will save jobs, amongst others.
He also took a swipe at the minister for conducting himself in a way that’s unbecoming in relation to public wage cut for the next three-years’ because “they were not consulted”.
Business Unity SA, Cas Coovadia, pointed out commitments are made but the very same commitments are not met, and this is major concern for BUSA.
Economist- Sfiso Skenjani believes the funds should be channelled to worthy causes considering the abject poverty faced post the Covid-19 by millions of South Africans on the bail out for SAA.
Pemmy Majodina ANC, says they welcome the budget and also pointed out actually this is not a bail out but a rescue.
On corrupt officials, Majodina says ‘orange overalls’ will be the order of the day this year and made a referral to the case against Bongani Bongo (ANC MP- who faces charges of corruption, fraud, theft and money laundering), whom she says will only step aside as soon as the Court makes its judgement.
Image (Upbeat. Finance Minister Tito Mboweni presented his Mid-Term Budget Policy at Parliament today).